Tesla has started a new ride-hailing service in the San Francisco Bay Area, including San Francisco, San Jose, and Berkeley. The company announced the launch on Thursday but didn’t say if self-driving cars will be part of the service. This move comes as Tesla faces strict rules in California that don’t yet allow the company to operate fully driverless robotaxis.
Currently, Tesla only has permission to test self-driving cars on public roads in California if a safety driver is behind the wheel. This means the new service in the Bay Area will use human-driven vehicles, not fully autonomous ones. Tesla had planned to include friends and family of employees and some public riders, but all rides are with a human driver to comply with state rules.
California’s Public Utilities Commission made it clear that Tesla cannot carry passengers without a driver in a self-driving vehicle. Before Tesla can charge customers for robotaxi rides, it must complete a trial phase without paying customers—something that has taken other companies, like Waymo, several years to complete.
Tesla’s service in Austin, Texas, includes robotaxis with a safety monitor in the front passenger seat. However, in the Bay Area, Tesla will require a human employee to drive at all times for now. The company hopes to expand robotaxi operations beyond Texas, aiming for states like California, Nevada, Arizona, and Florida, but is still waiting on regulatory approval.
Tesla’s entry into the Bay Area ride-hailing market puts it in direct competition with established companies like Waymo, Uber, and Lyft. Waymo has grown steadily in San Francisco and is now the second-largest ride-hailing service in the city after Uber.
For Tesla to fully launch its paid robotaxi service in California, it will need more permits from state regulators. This process is slow and could take years. Still, Tesla is pushing ahead with its goal to have robotaxis operating in many parts of the US by the end of this year.
The company’s shares dropped nearly 2% on Thursday, and Tesla has not provided further details as it continues to build out its ride-hailing plans in a crowded and closely regulated market.